Property and Equipment

12 Months Ended

Oct. 31, 2011

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Property and equipment, net

As of October 31, property and equipment, net included the following:

	2011			2010
(in millions)
Land	$	52		$	55
Buildings	387			366
Leasehold improvements	71			70
Machinery and equipment	2,280			2,242
Furniture, fixtures, and equipment	236			202
Equipment leased to others	291			361
Construction in progress(A)	309			74
Total property and equipment, at cost	3,626			3,370
Less: Accumulated depreciation and amortization	(2,056		)	(1,928		)
Property and equipment, net	$	1,570		$	1,442

_______________ 

(A) We are consolidating our executive management, certain business operations, and product development into a 1.2 million square foot, world headquarters site in Lisle, Illinois, which we will complete in the first quarter of fiscal 2012, and we are consolidating our testing and validation center in our Melrose Park facility, which we expect to complete in 2013. For 2011, Construction in progress includes amounts related to this activity.

Certain of our property and equipment serve as collateral for borrowings. See Note 10, Debt, for description of borrowings.

As of October 31, equipment leased to others and assets under financing arrangements and capital lease obligations are as follows:

	2011			2010
(in millions)
Equipment leased to others	$	291		$	361
Less: Accumulated depreciation	(103		)	(146		)
Equipment leased to others, net	$	188		$	215
Buildings, machinery, and equipment under financing arrangements and capital lease obligations	$	100		$	123
Less: Accumulated depreciation and amortization	(71		)	(64		)
Assets under financing arrangements and capital lease obligations, net	$	29		$	59

For the years ended October 31, 2011, 2010, and 2009, depreciation expense, amortization expense related to assets under financing arrangements and capital lease obligations, and interest capitalized on construction projects are as follows:

	2011		2010		2009
(in millions)
Depreciation expense	$	260	$	236	255
Depreciation of equipment leased to others	38		51		56
Amortization expense	1		2		6
Interest capitalized	18		4		1

Certain depreciation expense on buildings used for administrative purposes is recorded in Selling, general and administrative expenses.

Capital Expenditures

At October 31, 2011 and 2010, respectively, commitments for capital expenditures were $44 million and $24 million. At October 31, 2011, 2010, and 2009, liabilities related to capital expenditures that are included in accounts payable were $22 million, $14 million, and $12 million, respectively.

Leases

We lease certain land, buildings, and equipment under non-cancelable operating leases and capital leases expiring at various dates through 2024. Operating leases generally have 1 to 20 year terms, with one or more renewal options, with terms to be negotiated at the time of renewal. Various leases include provisions for rent escalation to recognize increased operating costs or require us to pay certain maintenance and utility costs. Our rent expense for the years ended October 31, 2011, 2010, and 2009 was $54 million, $57 million, and $54 million, respectively. Rental income from subleases was $4 million, $4 million, and $5 million for the years ended October 31, 2011, 2010, and 2009, respectively.

Future minimum lease payments at October 31, 2011, for those leases having an initial or remaining non-cancelable lease term in excess of one year and certain leases that are treated as finance lease obligations, are as follows:

	Financing Arrangements and Capital Lease Obligations			Operating Leases(A)		Total
(in millions)
2012	$	39		$	52	$	91
2013	64			50		114
2014	21			43		64
2015	1			40		41
2016	1			32		33
Thereafter	2			100		102
	128			$	317	$	445
Less: Interest portion	(10		)
Total	$	118

_______________ 

(A) In October 2011, we signed a lease agreement and a machinery and equipment purchase agreement related to a facility in Cherokee, Alabama. We will take possession of these assets January 1, 2012. The amounts presented above include amounts related to this lease.

Asset Retirement Obligations

We have a number of asset retirement obligations in connection with certain owned and leased locations, leasehold improvements, and sale and leaseback arrangements. Certain of our production facilities contain asbestos that would have to be removed if such facilities were to be demolished or undergo a major renovation. The fair value of the conditional asset retirement obligations as of the balance sheet date has been determined to be immaterial. Asset retirement obligations relating to the cost of removing improvements to leased facilities or returning leased equipment at the end of the associated agreements are not material.